Delta Air Lines today announced an agreement to transfer to four airlines 12 percent of the takeoff and landing slots involved in a previously announced transaction between the carriers at New York’s LaGuardia and Washington’s Reagan National airports. The transfers are contingent upon Federal Aviation Administration (FAA) approval and the subsequent closing of the originally proposed Delta-US Airways transaction.
In comments filed with the U.S. government today, Delta said it has concluded agreements with AirTran Airways (NYSE: AAI), Spirit Airlines and WestJet (TSE: WJA) to transfer up to five pairs each of takeoff and landing slots at LaGuardia. In a separate transaction, US Airways has agreed to transfer five pairs of Reagan National slots to JetBlue Airways (Nasdaq: JBLU).
AirTran, Spirit, WestJet and JetBlue are each considered limited incumbents or new entrant airlines by the FAA at these airports. In today’s filings, the four airlines urged the government to approve the proposed Delta-US Airways slot transaction.
Under Delta and US Airways’ originally announced proposal, US Airways would transfer 125 operating slot pairs to Delta at LaGuardia and Delta would transfer 42 operating slot pairs to US Airways at Reagan National. US Airways also would gain access to the key international destinations of Sao Paulo and Tokyo-Narita.
With the new six-way agreement, Delta would operate an additional 110 slot pairs at LaGuardia; AirTran, Spirit and WestJet would obtain five slot pairs each at LaGuardia from Delta; US Airways would acquire 37 slot pairs at Reagan National; JetBlue would gain five slot pairs from US Airways at Reagan National; and US Airways would gain access to Sao Paulo and Tokyo.
As previously outlined by Delta and US Airways, the airlines’ proposed transaction would add flights to a number of cities from both the New York and Washington, D.C. markets.
In New York, Delta will add or preserve service to dozens of small- and medium-sized communities while adding service in a number of markets not currently served by US Airways. The airline would also begin a multimillion dollar construction program at LaGuardia to connect the existing Delta and US Airways terminals. Delta has estimated that the transaction will generate as many as 7,000 new jobs in the New York City area driven by the construction of new facilities and the addition of service.
In Washington, D.C., US Airways will add 15 new, daily destinations to its schedule, including eight routes that currently have no daily nonstop service to Reagan National on any airline. US Airways plans to fly to all of the destinations that Delta decides to discontinue as a result of this transaction. The airline also will significantly expand its use of larger dual-class jets by nearly 50 percent at Reagan National.
Delta and US Airways on Aug. 12, 2009 announced their plans to transfer slots at LaGuardia and Reagan National airports. On Feb. 9, 2010, the FAA granted conditional approval of the transaction with a requirement that slots be divested at both airports. As part of their filings today, Delta and US Airways also submitted comments challenging the legal basis for the divestiture requirement. Delta and US Airways confirmed in today’s filings that they do not intend to go forward with the transaction on the conditions stated in the FAA’s Feb. 9 notice if the original transaction, as modified by today’s agreement, is not approved.